Walsh left Manchester City for Barcelona for a then-world-record fee of £400,000, but was keen to return to England to be close to family.
The WSL transfer deadline was on Thursday but the deal was only announced on Friday.
“I’m very happy to be back in England. It’s such a competitive league, I think you could see it today,” said Walsh.
“What brought me to Chelsea is they always find a way to win. I’m ambitious, I want to win trophies, and I think the club matches my ambition.”
Chelsea sit 10 points clear at the top of the WSL and are going for a record-extending sixth WSL title – and Walsh believes those achievements can be replicated in Europe.
“I think it’s the grit…they’ve got world-class players and can control games,” she added.
“Not many teams have what they’ve got, they always find a way to win, no matter how the goals come, how the goals look, they always score.
“I think that’s the exciting thing for me because we’ve got so many levels to go. Hopefully I can win the Champions League with an English team.”
